Should I Sell my EC upon MOP? Deep Dive into Gains Made by Past EC Owners: Report

Executive Summary

This research report examines the profitability of Executive Condominiums (ECs) in Singapore, focusing on the trends over various holding periods post-MOP. The key findings highlight that the highest returns are typically achieved in the first year post-MOP, where 40.5% of all units sold occurred. These units benefit from strong demand due to the limited supply of resale ECs, driving the average simple rate of return to 5.74%. In addition, the compounded annual growth rate (CAGR) also peaks in the 0-1 year period, at 4.87%, indicating strong price appreciation within this period. Beyond the first year, profitability continues to be steady, with another notable peak occurring around the full privatisation window (5-7 years post-MOP).

Our analysis also explores the long-term growth potential of ECs, particularly those launched before 2006, which have seen a consistent increase in value over time, with a median percentage change in PSF peaking after 20 years. This is driven by inflation, economic growth, and improvements in infrastructure and amenities surrounding these developments.

The report also provides a breakdown of top-performing EC projects by their median percentage change in PSF, highlighting developments such as Bishan Loft and The Quintet, which have shown exceptional capital appreciation.

Finally, the report projects the potential profitability of ECs launched between 2023 and 2025, using PLB’s methodology for price growth and assumptions. The analysis indicates that ECs are likely to continue offering strong investment opportunities, particularly as the Singapore government continues to balance supply and demand in the housing market while implementing cooling measures to ensure sustainable growth.

This report serves as a comprehensive guide for EC owners and potential buyers, helping them navigate the EC market and make informed decisions on the optimal time to sell or invest in EC properties.

Methodology

Our research methodology is anchored in data provided by the Urban Redevelopment Authority (URA). Staying informed on market trends is crucial to gaining a comprehensive understanding of the key forces shaping Singapore’s real estate landscape.

We utilise performance data from URA to construct subsamples for detailed analysis. From the data extracted, we derived the median percentage change in PSF price and calculated the simple rate of returns and CAGR for EC transactions. These subsamples are categorised based on the number of years held after MOP and corresponding profit quantums. Our approach combines descriptive statistics with qualitative insights to identify patterns and trends specific to the EC market.

This EC Research Report is designed to assess the profitability of ECs upon their MOP and ultimately identify the optimal holding period after MOP. The research report helps determine if there are specific time windows where ECs perform better, which can help current owners and potential investors decide when to sell to maximise profitability. The findings are specific to the EC segment and will be further refined and expanded upon by PLB’s Editorial team as needed.

Introduction

PLB remains bullish about the EC market, underpinned by strong fundamentals and a lower price entry point compared to private condominiums. This allows EC homeowners to realise substantial profits upon resale. Additionally, the current favourable market conditions, including a lower interest rate environment, have loosened credit conditions in the residential market, reducing borrowing costs and potentially lifting consumer sentiment. These conditions ease concerns of a hard landing or economic recession, supporting continued demand for ECs.

ECs are a hybrid housing type in Singapore, developed by private developers but sold under government regulations. Cater to the middle-income group, ECs offer private condominium features but at a more affordable price point. This allows first-time EC buyers to enjoy the quality and amenities of a private condominium while benefiting from government subsidies. However, ECs are subject to specific regulations. Upon reaching the MOP, which is five years after the TOP, ECs can be sold on the secondary market but only to Singapore Citizens and Permanent Residents. This restriction applies between the 5th and 10th year after TOP. After 10 years, ECs are fully privatised and can be bought and sold like private properties, including transactions involving foreigners and entities, and can also be put up for en-bloc sales.

Despite these rules, resale ECs have demonstrated sustained price growth over the past decade, comparable to private resale condominiums. According to data from the Urban Redevelopment Authority (URA), the median prices of all resale ECs achieved a CAGR of 6.6% from 2015 to 2024, outperforming the 3.7% CAGR recorded for median prices of all private resale condominiums during the same period. 

In addition, the lower initial prices of ECs during new launches have enabled owners to realise substantial profits upon resale, as they are able to sell their units at prices comparable to private condominiums. 

However, the key question remains: when is the optimal time for EC owners to sell in order to maximise profits? This research report examines profitability over different time periods, measured by the number of years after the MOP. Our goal is to provide a comprehensive analysis to help you determine the best time to sell your EC.

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